News & updates

The U.S. Labor Department will implement its fiduciary rule on June 9 with no further delays, U.S. Labor Secretary Alexander Acosta said on Tuesday.The department's rule, which requires brokers offering retirement investment advice to act in the best interest of their customers (that is, under a "fiduciary" standard), has been heavily criticized by Republicans and Wall Street amid concerns it may make investment advice too costly.The fiduciary rule was drawn up under the Obama administration amid concern that many retirement savers were being steered into high-cost investments that could eat away at their savings. The rule is intended to discourage brokers and other financial professionals from putting retirement-plan assets into products that pay high commissions or profit-sharing compensation to the brokers--a practice that's currently legal as long as the investments can be portrayed as "suitable" for the customer.The rule has faced a rocky time becoming effective, with President Trump last month delaying its enactment date, originally April 10, for 60 days. Trump has also ordered a review of the rule.Acosta, in an opinion piece for the Wall Street Journal, which was also shared with Reuters, said there was "no principled legal basis to change the June 9 date while we seek public input."Calling the fiduciary rule a "controversial regulation," Acosta said that while courts have upheld the rule as consistent with Congress' delegated authority, it may not align with Trump's "deregulatory goals."He also said the department was seeking "public comment" on how to revise the rule, leaving open a possibility of repealing the rule in future."These are signs of positive movement for advisers and active managers despite industry disappointment that Labor failed to kill the rule," Cowen and Co. analyst Jaret Seiberg said in a client note.Some Democratic Senators on Friday raised concerns over the possibility that the Trump administration will permanently shelve the fiduciary rule.

The applicability date of the fiduciary rule, originally scheduled for April 10, has been pushed back to June 9 with a transition period for exemptions to the rule to run from June 9 through Jan. 1, 2018.

"The Department acknowledges that it is not likely to complete its required examination of the fiduciary rule by June 9," said Investment Company Institute President and CEO Paul Schott Stevens, in a statement. "If the DOL does not act by June 9 — either to make such a determination, or to further delay the applicability of the rule and any condition of its related exemptions — it risks creating significant market disruptions that will reduce retirement savers’ access to retirement products, services and related financial information and advice."The department said it received some 193,000 comment letters on the proposal, 178,000 of which opposed any delay of the fiduciary rule. By contrast, some 15,000 supported pushing back the applicability by 60 days or more, with some asking for up to a year or more, or repeal of the rule altogether.

The delay is meant to give the department time to collect and consider information related to issues raised in President Donald Trump’s memorandum. Brokerage industry advocacy groups continue to push for outright repeal of the rule. In February, a U.S. federal court judge in Texas upheld the DOL fiduciary rule in a lawsuit challenging it. The nine plaintiffs, including the U.S. Chamber of Commerce, the Securities Industry and Financial Markets Association (SIFMA), the Financial Services Institute, Financial Services Roundtable, and Insured Retirement Institute filed an appeal in the U.S. Court of Appeals for the Fifth Circuit. The plaintiffs also sought an emergency stay on the April 10 applicability date; the Texas judge denied that motion.

"We are confident the DOL will find that the fiduciary rule is inconsistent with the administration’s goal 'to empower Americans to make their own financial decisions, to facilitate their ability to save for retirement and build the individual wealth necessary to afford typical lifetime expenses, such as buying a home and paying for college, and to withstand unexpected financial emergencies,'" said the Financial Services Institute, in a statement. ​

In a field assistance bulletin posted Friday night, the Department of Labor announced a temporary enforcement policy meant to avoid confusion over a proposal to delay its fiduciary rule.

​On March 2, the DOL proposed a rule that would delay the fiduciary rule implementation date (April 10) by 60 days. That will give the agency time to collect and consider information related to issues raised in President Donald Trump’s memorandum on the rule. The public has until March 17 to comment on the proposal, and, if passed, the 60 day-delay would begin on the publication date of a final rule. But April 10 is fast-approaching, and it’s unknown whether that the department will finalize the delay by then. “Although the Department intends to issue a decision on the March 2 proposal in advance of the April 10 applicability date, financial services institutions have expressed concern about investor confusion and other marketplace disruption based on uncertainty about whether a final rule implementing any delay will be published before April 10, whether there may be a ‘gap’ period during which the fiduciary duty rule becomes applicable before a delay is published after April 10, or whether the Department may decide either before or after April 10 not to issue a delay based on its evaluation of the public comments,” writes John J. Canary, director of regulations and interpretations, in the bulletin.

In the first part of the temporary policy, the department says that even if April 10 comes around and a delay hasn’t been finalized, they will not pursue enforcement actions against advisors or financial institutions who fail to satisfy the conditions of the rule or prohibited transaction exemptions. If an advisor fails to provide a client with a disclosure document, for example, they won’t be subject to disciplinary action.

Secondly, if the DOL decides not to issue a delay and it is past April 10, the department will not pursue enforcement action for violations of the rule “within a reasonable period after the publication of a decision not to delay the April 10 applicability date.” And if the department makes a decision on proposed delay and that causes more confusion, the agency will consider additional temporary relief, the bulletin said.“It has been the Department’s longstanding commitment to provide compliance assistance to employers, plan sponsors, plan fiduciaries, employee benefit plan officials, and financial services and other service providers so that the fiduciary duty rule and exemptions are implemented in an efficient and effective manner.”

As you know by now, the DOL Fiduciary Rule has been delayed for a shorter period of time than anticipated... This delay has made it even tougher for brokers to plan for the future. Do you really understand what the rule is even about? If you want a very concise explanation of what may happen, you can listen to the following webinar by Todd Berghius, Senior ERISA Counsel from Integrated Retirement by clickinghere.

Assuming you listened to the piece, you will probably still have one major question, and that is, "What can I do to be prepared just in case all or part of this rule is upheld?" The best information available to you today is to divide the rule into two parts, the B.I.C. and the B.I.C.E.

The B.I.C. - It seems no one (carriers or associations, legal counsel, etc.) will fight, argue or disagree with the fact that agents should operate in the “best interest of the client”, so most likely anyone who works for commissions is going to have to adjust the way in which they present and track the options they recommend to clients. You are going to have to be able to show the clients risk tolerance, source of funds, financial wherewithal, and even what compensation you will make on the various products you suggest.

In regards to the B.I.C.E, most agree that this is where the problems with the rule really begin to jump out. Who wants or can afford the legal liability of being a “fiduciary”? How can the industry as a whole comply with what the ruling demands regarding leveling all compensation across the board so no one product pays more than the next? The questions like these go on and on.

For right now, let’s start simple, at AMC Life Marketing we are prepared to help you solve both of these problems immediately, if the need arises. Over the next two weeks we will show you how we can help you continue working without interruption no matter which way the DOL decides to go on these two major points. Be ready, keep reading, and we’ll answer all of your questions over the next two weeks! ​

In a field assistance bulletin posted Friday night, the Department of Labor announced a temporary enforcement policy meant to avoid confusion over a proposal to delay its fiduciary rule.On March 2, the DOL proposed a rule that would delay the fiduciary rule implementation date (April 10) by 60 days. That will give the agency time to collect and consider information related to issues raised in President Donald Trump’s memorandum on the rule. The public has until March 17 to comment on the proposal, and, if passed, the 60 day-delay would begin on the publication date of a final rule. But April 10 is fast-approaching, and it’s unknown whether the department will finalize the delay by then.

“Although the Department intends to issue a decision on the March 2 proposal in advance of the April 10 applicability date, financial services institutions have expressed concern about investor confusion and other marketplace disruption based on uncertainty about whether a final rule implementing any delay will be published before April 10, whether there may be a ‘gap’ period during which the fiduciary duty rule becomes applicable before a delay is published after April 10, or whether the Department may decide either before or after April 10 not to issue a delay based on its evaluation of the public comments,” writes John J. Canary director of regulations and interpretations, in the bulletin.In the first part of the temporary policy, the department says that even if April 10 comes around and a delay hasn’t been finalized, they will not pursue enforcement actions against advisers or financial institutions who fail to satisfy the conditions of the rule or prohibited transaction exemptions. If an adviser fails to provide a client with a disclosure document, for example, they won’t be subject to disciplinary action.In the second part of the temporary policy, if the DOL decides not to issue a delay and it is past April 10, the department will not pursue enforcement action for violations of the rule “within a reasonable period after the publication of a decision not to delay the April 10 applicability date.”And if the department makes a decision on proposed delay and that causes more confusion, the agency will consider additional temporary relief, the bulletin said.​John Canary continued, “It has been the Department’s longstanding commitment to provide compliance assistance to employers, plan sponsors, plan fiduciaries, employee benefit plan officials, and financial services and other service providers so that the fiduciary duty rule and exemptions are implemented in an efficient and effective manner."